Banks are closing branches at a record pace, WSJ reports

What’s going on here? Changing consumer habits. Foot traffic to bank branches has fallen in recent years as customers do more business at ATMs and through mobile apps.

And the strategy of closing branches isn’t hurting banks, it’s helping them reduce costs and reach record profits.

“A bank to a millennial is his or her smartphone,” Clark said. “By the way, I’m far from a millennial, but for me, that’s true too.”

Bank closures are hitting many rural areas the hardest because there are fewer options. But whether you live in a small town or not, Clark says you’re better off switching to an online bank or credit union for lower fees and higher returns.

“Bank branches destroy the soul of a neighborhood. They’re open very few hours because of the problems with bank robbery — they’re very closed off kind of fortresses — and they’re incredibly expensive to run,” Clark said.

Listen to Clark talk about this issue on The Clark Howard Show Podcast

If you’re interested in switching to a better bank for you, Team Clark is here to help. Follow our step-by-step guide that will walk you through the process of getting started with an online bank or credit union.

7 ways you could accidentally commit tax fraud

Three men in India were arrested for a massive tax scheme targeting Americans. The men posed as IRS officials to tell victims they had tax irregularities. Police said the men would get victims to transfer money to them.

— Not every fraud artist is a sketchy identity thief or faux Nigerian prince from the dark corners of the internet. You might end up committing fraud entirely by accident if you don’t pay careful attention this tax season.

Individual slip-ups usually result from negligence rather than ill intent, but even white lies fall into the latter category. The IRS is serious about nipping fraud in the bud — for 2017, it added 37 new steps to its authentication process to safeguard against it. For you, that means 37 new reasons to check and double-check your return before filing your taxes — plus seven more from GOBankingRates. Get the deductions and credits you’re entitled to, but make sure you do it legally. So that you don’t accidentally commit tax fraud, check out these seven common mistakes to avoid when filing taxes.

1. Filing a return with missing or incorrect information

It’s crucial to file complete and accurate tax returns — or you might be committing tax fraud. For example, if you paid thousands of dollars to attend college this year, you might be eligible to claim an education tax credit to reduce your taxes.

If you claim an education credit, however, don’t forget to include Form 8863 — for education credits — with your return. Forgetting to include vital data like your Social Security number — or entering it incorrectly — also can create headaches.

Potential penalty: Typically, if you forget or make a mistake on your return information you’ll experience delayed processing of your tax return. Keep in mind that omissions prompt the IRS to take a closer look at your forms — and maybe even target you for tax fraud. If omitted data changes your status from owing money to getting a refund — or even just makes your refund higher — your mistake could be interpreted as willful failure to supply information, which comes with penalties of up to a year in prison, $100,000 in fines or both.

2. Incorrectly claiming the earned income tax credit

Claiming the earned income tax credit when you’re not eligible for it is a major audit trigger. If you qualify for the credit, which is designed to offset the burden of Social Security taxes for low-to-moderate earners, you can get credited up to $6,318 — but you must meet specific requirements. When filing your 2017 taxes, the EITC income limits range from $15,010 to $53,930, depending on your marital status and number of qualifying children.

How to avoid it: Don’t file for the EITC if you have investment income exceeding $3,450. Child support, alimony, welfare compensation and workers’ compensation benefits do not contribute toward earned income. Your eligibility might fluctuate from year to year, so read the requirements closely each tax season.

Potential penalty: This issue could result in a delay, denial or required payback of your EITC refund — and possibly a ban from claiming the EITC for anywhere from two to 10 years.

3. Abusing tax shelters

Chances are, a tax shelter that sounds too good to be true likely is. Often, accountants and wealth planners tempt taxpayers with vague or deceptive tax shelter “opportunities,” or offer “captive” insurance structures that are at odds with your company’s genuine needs, duplicate your existing coverage or provide coverage for totally implausible events. Your barbershop in Indiana probably isn’t going to get attacked by tigers, so don’t use that excuse as a tax shelter.

How to avoid it: If you’re in over your head on tax shelters, seek out an independent opinion. Be especially wary of ambiguous micro-captive insurance tax shelters, which have been highlighted for the past three years on the IRS’s annual “Dirty Dozen” list of tax scams.

Potential penalty: “These scams can end up costing taxpayers more in penalties, back taxes and interest than they saved in the first place,” said IRS Commissioner John Koskinen. In addition, the IRS can count this as tax avoidance or evasion, which might net you fines of up to $250,000 and jail time of up to five years.

4. Claiming the wrong deductions

If you think it’s clever to take the family along on a business trip just to deduct the vacation as a business expense, think again. When April rolls around, forget about claiming your family’s side trip to Disneyland.

Some commonly misused deductions — likes writing off groceries that you didn’t explicitly buy for clients or employees — are just plain mistakes. But if you knowingly make false statements on your return, expect trouble.

How to avoid it: Again, tax prep software helps prevent errors — it typically shows the deductions for which you qualify. If you’re going “old school,” explore the IRS website, which offers tips for deducting business expenses and full breakdowns of what you can legally deduct. Key IRS documents like publications 535, 334 and 538 detail eligible business expenses and offer tax guides for small businesses.

Potential penalty: If you’re guilty of fraudulent activity or false statements, you could be looking at some combination of imprisonment of up to three years and fines of up to $250,000.

5. Taking inflated deductions

Your chances of being audited are lower than ever: This is the sixth straight year during which numbers have dropped and in 2016, only 1 million Americans were audited, according to CNBC. That might make it tempting to claim your whole basement as a home office deduction, but don’t.

Even if the chances of getting caught are low, inflated deductions are still illegal. “You don’t want to roll the roulette wheel and have the little white ball land on your number,” said Koskinen.

How to avoid it: Don’t stretch the truth. If you think you’ll have trouble paying what you owe all at once, work out a payment plan or installment agreement with the IRS via its Online Payment Agreement Tool or Form 9456.

Potential penalty: For an incorrect filing like this, the IRS can hit you with a $5,000 fine, a fee of 20 percent of the disallowed amount or a penalty in the amount of 75 percent of the full income tax you owe. You might even face an IRS criminal investigation.

6. Failing to report income

It’s easy to not claim all your tips — in fact, the IRS estimates up to 40 percent of tips go unreported. But don’t get too comfy — failing to report your income to the Internal Revenue Service might count as tax evasion or failure to supply information.

How to avoid it: If you’re a server, keep a daily record of all tips you receive and use Publication 531 to report your tip income. Whether you’re a server or not, don’t fall victim to common misconceptions — use the most recent version of Publication 525 to keep track of what the IRS considers taxable and nontaxable income.

Potential penalty: For not reporting tips, you’re subject to a penalty equal to 50 percent of the Social Security, Medicare, Medicare or Railroad Retirement taxes you owe on unreported tips. Regardless of your industry, tax evasion penalties can cost you up to five years in prison and up to $250,000 in cash.

7. Falling victim to tax preparer fraud

“Choose your return preparer carefully because you entrust them with your private financial information that needs to be protected,” said Koskinen. About 60 percent of U.S. taxpayers use tax professionals to prep their returns — and the vast majority of those pros are honest, according to the IRS. It’s possible, however, that the preparer you rely on might dupe you into claiming credits or deductions you’re not entitled to in order to increase his own fee.

How to avoid it: When choosing a tax preparer, always confirm his IRS Preparer Tax Identification Number and professional credentials via the online IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.

Potential penalty: Penalties like jail time typically fall on the preparers for defrauding their clients. If you get caught up in an illegal scam, though, you’ll be up against what the IRS calls “significant penalties,” which include interest charges and possible criminal prosecution. To report preparer tax fraud, use Form 14157.

5 fast facts that will help make filling out FAFSA a breeze

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA Fill it out – you have nothing to lose The sooner you submit your FAFSA, the better Gather the information you'll need Watch out for common mistakes like leaving fields blank Keep an eye out for requests for more information

The idea of wading through a form – especially one that requires financial information – is definitely not an appealing idea, but the FAFSA could be a tremendous help in getting your student money to attend college.

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA.

Fill it out – you have nothing to lose.

You may think that you don't need to fill out the FAFSA, especially if you believe you might not qualify for need-based aid. But there's no income cut-off point with federal student aid, according to the U.S. Department of Education. In addition, the FAFSA can help you qualify for all kinds of grants, loans and scholarships, including those offered by your state, school or private organizations.

By investing a few minutes of time, you could reap thousands of dollars in potential rewards.

Submit it ASAP.

The sooner you submit your FAFSA, the better, according to consumer adviser Clark Howard. Although the federal deadline isn't until June 30, 2018, you should check with the financial aid administrator at colleges you're interested in to make sure their deadlines aren't earlier.

Submitting earlier will help you plan how you'll pay for college. You'll also have a better chance of getting as much aid or scholarship money as possible since some colleges distribute their available money on a first-come, first-serve basis, Howard says.

Gather the information you'll need.

The FAFSA asks questions about the student as well as his or her parents if the student is a dependent.

You'll need the following information on hand as you fill out the FAFSA:

The student's Social Security number

The parents' Social Security numbers

Driver's license number (if you have one)

Alien registration number (if you're not a U.S. citizen)

Federal tax information for the student (and his or her spouse, if applicable) and the parents. This can often be imported online, so you may not need your records.

Information on the student's and parents' assets, such as money held in bank accounts and real estate holdings (not your primary residence)

Records of the student's or parents' untaxed income, such as veterans benefits and interest income

Leaving some fields blank – Instead, put in a "0" or "not applicable."

Listing an incorrect Social Security or driver's license number – It pays to recheck these numbers.

Failing to use your legal name – Use the name on your Social Security card, not a nickname.

Forgetting to list colleges – Even if you're not sure of which college you'll be attending, add any reasonable possibilities to the list of colleges that will receive your information. You're under no obligation to apply to or attend these colleges, and they can't see which other colleges you're interested in.

Keep an eye out for requests for more information.

Your FAFSA may be selected for verification, which means you'll have to provide some additional or supporting information, U.S. News & World Report explains. This process doesn't necessarily mean you've done anything wrong. You may have a discrepancy or mistake on your form, but some FAFSAs are just randomly selected for verification (lucky you!).

These requests will often come to the student's personal email account or university email address, so he or she will have to be diligent about checking it and responding to any requests by the stated deadline.

Is credit monitoring a scam?

— With the recent massive security breach of Equifax — one of the three credit bureaus with which many may have thought their private information was safer than most — now many people are dealing with more insecurities, wondering where they can entrust their private information, if anywhere.

Here are some options:

Credit freezing

Better and cheaper than credit monitoring, an option for optimal security is freezing your credit through each of the three credit bureaus (Experian, Equifax and TransUnion), according to WSB money expert Clark Howard at Clark.com.

The fee is $3 to $10 per person per bureau, depending on your state, to allow you to seal your credit reports — except now it's free with Equifax from here on out due to the recent data breach.

You will be provided with a personal identification number (PIN) that only you know and can be used to temporarily unfreeze (or "thaw") your credit when legitimate applications for credit and services need to be processed such as when you are buying a car.

This added layer of security means thieves can't establish new credit in your name even if they are able to obtain your personal information.

LifeLock vs. CreditKarma.com

While LifeLock advertises it can help consumers secure their information to guard against identity theft, LifeLock charges monthly services that start at $10 a month.

Experian IdentityWorks also offers a free 30-day trial membership for identity theft protection and resolution, involving a monthly automatic deduction of $9.99 for the plus plan or $19.99 for the premium plan.

It's free to cancel within the 30-day trial period, but the consequences are not revealed up front for those who decide to cancel their membership once the monthly fees begin.

TransUnion

The third credit bureau, TransUnion, also offers credit monitoring at $19.95 monthly. However, TransUnion says it offers free identity protection through its TrueIdentity program.

Free helpline

Those with specific questions about the Equifax breach and how it may impact them may contact Howard's Consumer Action Center — a free helpline open 10 a.m. to 7 p.m. EST Monday through Friday with Team Clark volunteers available to answer concerns at 404-892-8227.

Before jumping in, you'll need to take time to learn about the market, your expenses and any taxes you may need to pay. And before you list your property, you'll need to understand how to make it stand out with a good listing, including compelling photos and competitive pricing. Airbnb has a series of toolkits to help with this.

When TV, film and commercial producers want to depict a home on screen, many times they'll rent the real thing, according to Money. It can be inconvenient for owners, however, since their homes may be taken over by a large crew and be completely rearranged.

On the other hand, homeowners often have fun with the experience while making some extra money. And while you're watching TV or a movie, you may be able to spot your home.

Host a foreign exchange student or faculty member.

Temporarily hosting a foreign exchange student or faculty member who's studying or teaching in this country can help you make some extra cash for anywhere from six weeks to six months at a time. You'll also be exposed to a different culture and language, and the experience could help you form a bond that lasts even when your guest returns home.

The Penny Hoarder suggests contacting student housing offices at local community colleges and universities, asking to be placed on their list of host families. After this, you'll have to apply, be interviewed, and allow your home to be toured. You'll also need to pass background and reference checks.

The 4-bedroom house sits on a corner lot with a concrete driveway that leads up to the two 2-car garages both having rear service doors. CONTRIBUTED PHOTOS BY KATHY TYLER

Rent out your driveway or storage space.

If you have extra space in your driveway, you may be able to make some money by letting others park there, according to Men's Health. This is especially true if you live near a commuter rail line or sports stadium, but you'll need to check to make sure you're not violating any local ordinances. Check out websites like JustPark to get started.